Cornwall Waste Forum said it was delighted with the judge's decision. Campaigners have won a legal challenge to block the building of an incinerator in Cornwall.

The £117m scheme at St Dennis was refused by the former county council, but the government overturned the decision.

A High Court judge said on Thursday the government had not properly considered whether an environmental assessment had to be carried out.

Waste firm Sita UK warned delays could raise costs to more than £200m.

Cornwall Council, which took over from the county council in 2009, said the decision would cost the council about £1m a month in extra landfill and haulage costs.

The decision by the High Court Judge Mr Justice Collins to quash the government's decision for an energy from waste plant leaves Cornwall Council in a difficult position.

It says it is currently spending about £1m a month on the landfill tax and haulage costs and its also got something else to worry about.

Cornwall's landfill site at Connon Bridge in East Cornwall runs out of planning consent by 2014.

So where exactly is Cornwall going to put its rubbish in future and does the Council have a plan B?

Campaigners who have fought this battle say that's not their worry and Cornwall Council should have opted for more modern technologies to dispose of waste such as gasification and pyrolysis.

Judge Mr Justice Collins said that when Communities Secretary Eric Pickles overturned the county council's decision, he had not properly considered whether the EU Habitats Directive required special assessment to be carried out before permission was granted.

Sita UK said the judgment gave the company "considerable concern".

Project manager David Buckle said: "It is important that the scheme is able to progress, as without it Cornwall is facing an enormous waste problem."

The judge gave the government permission to take its case to the Court of Appeal.

He said: "The problem that faces me is that the Habitats Directive and regulations are the law and must be obeyed."

Cornwall Council said it would be "pressing for an early resolution as further delays will not only extend uncertainty over this process but could prove financially disastrous for people in Cornwall".

It said each month's delay would cost the council about £1m in landfill tax and haulage costs, "creating serious implications for the council's budget".

Stephen Gilbert, Liberal Democrat MP for Newquay and St Austell, said the "hugely welcome" decision was "a victory for people power".

Cornwall Council said delays could cost it about £1m a month
He said: "Today's news from the High Court represents a great result for St Dennis.

"It's time for Cornwall Council, Sita and representatives from our local communities get around the table and think again."

Ken Rickard, chairman of the Cornwall Waste Forum which took the case to court, said: "We're over the moon, delighted.